Book manufacturers and publishers debated the merits and challenges of printing books on demand at the Digital Book Printing Conference in October. For some publishers, the model has already proven beneficial.

“Zero inventory” was the buzzword at the Digital Book Printing Conference hosted in New York City this October. Throughout the event, book manufacturers and publishers posed the following question: is the zero inventory model, in which manufacturers print and distribute all titles on an on demand basis, achievable for book publishers? The question sparked a substantial debate between the book manufacturers and publishers in attendance. Advocates, including many manufacturers, insisted the technology to print all titles on demand, without inventory, exists today. They added that it’s simply a matter of publishers trusting that the systems and technology for a zero inventory model to gain widespread use in the industry. Detractors cited a laundry list of concerns, from infrastructure limitations that preclude the dissolution of warehousing to the fact that production of some titles, particularly bestsellers, cannot be fulfilled by the on-demand, zero inventory model.

Ultimately, the viability of the zero inventory model seemed to boil down to the type of books a publisher creates and the unique market factors affecting different segments of the industry. Yvette Nora, director of global procurement at Reed Elsevier, said that a zero inventory is very achievable for her company and for many in the education space. In fact 95% of Reed Elsevier’s science and technology titles will be printed on demand, without inventory, by the end of 2015, and Nora is confident that the publisher will soon print 100% of those titles print-on-demand (POD).

Zero inventory works for Reed Elsevier for a number of reasons. First, the demand for print titles in the education and journal space dropped significantly with the rise of ebooks and online publishing, said Nora. The drop in print units made printing on digital toner more affordable. The second factor that moved Reed Elsevier towards a POD model was actually a sales issue. Reed Elsevier is a global publisher and many books weren’t reaching international customers fast enough. The solution was to print titles on demand in the countries they were needed most, instead of printing them in the U.S. and shipping them overseas, which took weeks. Inkjet technology played a significant role in making this initiative work, and brought Reed Elsevier’s POD program into full force in 2012, said Nora. “We have tracked the cost savings through our business case for POD, and we’re pleased to see that we’re saving the 30% that we were expecting.”

Listen to the complete story behind Reed Elsevier’s move to POD below.

Large trade publishers, on the other hand, face a different set of challenges than educational publishers. Bill Barry, sustainability & vendor partnership consultant at Macmillan, explained these issues during a panel titled, “Battle of the Business Models: Is It Realistic to Get Down to Zero Inventory?” He said that legacy assets such as warehouses, which many trade publishers earn revenue on through third-party distribution, have created significant hurdles to adopting a POD model. “As the print inventory shrinks with the rise of ebooks, you aren’t able to just collapse the warehouse,” said Barry.

Barry added that the current revenue model for trade publishers, where the top 20% of titles earn the majority of revenue, isn’t suitable for POD. These titles are the blockbuster bestsellers and POD still does not make sense for these long runs. “Ultimately, I don’t think zero inventory is achievable in my lifetime, however I think there is 1/6, 1/8, or 1/10 of titles that would make sense for POD for some very compelling business reasons. But the top of the list, the bestsellers, will always go out offset.”

Listen to Barry’s full explanation below.

What do you think? Can book publishers adopt a zero inventory model? And are the savings worth the initial investment?

YBK Publishers has maintained zero inventory since its beginnings in 2001, producing its entire list POD. It has never printed a book by any other process.

Devaki Khanna

With regard to POD in trade publishing: While it is true that 20 per cent of trade titles are perceived to be bestsellers and published in large numbers, why not publish the 80 per cent mid-list titles on a POD basis?

Ellen Harvey

Thanks for the comment, Devaki. I agree with you that a large portion of trade publishers’ titles could be printed on demand. At the Digital Book Printing Conference, Bill Barry said that the initial investment in IT and the loss of revenue publishers would experience from collapsing their warehouse were two of the major deterrents to adopting POD. I think in the next few years, though, as demand for print lessens, the economics will force publishers to adopt a POD model.